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The Third Circuit Court overturned a lower-court ruling, reinstating nearly all of Pennsylvania's blatantly protectionist, anti-competitive laws restricting who can own funeral homes, what they can be called, whether they can serve food, and more. FCA filed a friend of the court brief on behalf of the plaintiffs, led by funeral director Ernie Heffner, when the case was before the district court. We agreed that many of the state laws at issue actually harmed consumers by preventing competition and innovation among funeral homes by propping up existing large, powerful funeral home operators.

The Institute for Justice issued the following press release. Note: We do not know what the next steps for the plaintiffs may be.

Arlington, Va.—Today, the 3rd U.S. Circuit Court of Appeals overturned a lower court ruling that invalidated 10 of Pennsylvania’s outdated, irrational and, in most cases, blatantly anti-competitive funeral regulations as unconstitutional. The case was brought by a group of Pennsylvania funeral directors and challenged several of Pennsylvania’s funeral laws, including a requirement that every funeral home have an embalming room. The Institute for Justice filed a friend-of-the-court brief in the case, arguing the regulations are ineffective and wasteful and that it is the judiciary’s job to engage in a meaningful evaluation of whether laws serve their purposes and to strike them down as unconstitutional when they do not.

“Today’s court decision completely ignored evidence that Pennsylvania’s funeral regulations do nothing to advance the public health and did little more than rubber stamp an irrational, protectionist law,” said IJ Attorney Dan Alban, who authored IJ’s amicus brief in the Heffner v. Murphy case. “As IJ’s brief argued, proper application of the rational-basis test demands that courts engage in a genuine, meaningful review of the evidence to determine whether a law actually accomplishes its purposes, which is something that the court did not do today.”

The lawsuit brought by several smaller Pennsylvania funeral directors challenged 10 of Pennsylvania’s funeral regulations as unconstitutional and anti-competitive. Included among the challenged regulations is Pennsylvania’s requirement that all funeral homes be outfitted with an embalming room, even if the embalming room is never used—a law that is nearly identical to the embalming-room requirement that IJ successfully challenged in Minnesota.

“The 3rd Circuit’s decision essentially makes it impossible for entrepreneurs to change useless laws that exist only to protect large funeral homes from competition,” Alban said. “As the court acknowledged, funeral directors tried to get the law changed in the legislature in 2008 and failed because large funeral homes opposed it. Nonetheless, the court refused to do its job and strike down the law, stating that entrepreneurs should just try again in the legislature, even though history shows their attempts would be futile.”

“Today’s ruling shows what happens when courts fail to subject regulations to meaningful scrutiny and reinforces the need for courts to reclaim their role as the branch of government responsible for checking the legislature,” said Clark Neily, IJ senior attorney and author of “Terms of Engagement,” a book arguing in favor of judicial engagement.# # #

The Third Circuit Court overturned a lower-court ruling, reinstating nearly all of Pennsylvania's blatantly protectionist, anti-competitive laws restricting who can own funeral homes, what they can be called, whether they can serve food, and more. FCA filed a friend of the court brief on behalf of the plaintiffs, led by funeral director Ernie Heffner, when the case was before the district court. We agreed that many of the state laws at issue actually harmed consumers by preventing competition and innovation among funeral homes by propping up existing large, powerful funeral home operators.

The Institute for Justice issued the following press release. Note: We do not know what the next steps for the plaintiffs may be.

Arlington, Va.—Today, the 3rd U.S. Circuit Court of Appeals overturned a lower court ruling that invalidated 10 of Pennsylvania’s outdated, irrational and, in most cases, blatantly anti-competitive funeral regulations as unconstitutional. The case was brought by a group of Pennsylvania funeral directors and challenged several of Pennsylvania’s funeral laws, including a requirement that every funeral home have an embalming room. The Institute for Justice filed a friend-of-the-court brief in the case, arguing the regulations are ineffective and wasteful and that it is the judiciary’s job to engage in a meaningful evaluation of whether laws serve their purposes and to strike them down as unconstitutional when they do not.

“Today’s court decision completely ignored evidence that Pennsylvania’s funeral regulations do nothing to advance the public health and did little more than rubber stamp an irrational, protectionist law,” said IJ Attorney Dan Alban, who authored IJ’s amicus brief in the Heffner v. Murphy case. “As IJ’s brief argued, proper application of the rational-basis test demands that courts engage in a genuine, meaningful review of the evidence to determine whether a law actually accomplishes its purposes, which is something that the court did not do today.”

The lawsuit brought by several smaller Pennsylvania funeral directors challenged 10 of Pennsylvania’s funeral regulations as unconstitutional and anti-competitive. Included among the challenged regulations is Pennsylvania’s requirement that all funeral homes be outfitted with an embalming room, even if the embalming room is never used—a law that is nearly identical to the embalming-room requirement that IJ successfully challenged in Minnesota.

“The 3rd Circuit’s decision essentially makes it impossible for entrepreneurs to change useless laws that exist only to protect large funeral homes from competition,” Alban said. “As the court acknowledged, funeral directors tried to get the law changed in the legislature in 2008 and failed because large funeral homes opposed it. Nonetheless, the court refused to do its job and strike down the law, stating that entrepreneurs should just try again in the legislature, even though history shows their attempts would be futile.”

“Today’s ruling shows what happens when courts fail to subject regulations to meaningful scrutiny and reinforces the need for courts to reclaim their role as the branch of government responsible for checking the legislature,” said Clark Neily, IJ senior attorney and author of “Terms of Engagement,” a book arguing in favor of judicial engagement.# # #

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Speakers

We've got a fantastic line-up of consumer advocates, legislators, and young, innovative people in the funeral and burial business focused on bringing consumers real choice while maintaining affordability.

caitlindoughty

Caitlin Doughty is easily the funniest funeral director in the country. If you haven't seen her informative-while-totally-hysterical "Ask a Mortician" Youtube series, run, don't walk. It's the only video series to combine death, dying, and drag queens---what more could you ask for?

Caitlin has been featured on NPR, in the Huffington Post, and more. You'll be seeing much more of her when her forthcoming book, Smoke Gets In Your Eyes, is published by W.W. Norton and company later in 2014. Join her for an irreverent breath of fresh air about the foibles of the funeral industry!

Surprisingly, the Federal Trade Commission accepted some truly bizarre funeral industry assertions when deciding which properties funeral giant Service Corporation International (brand name: "Dignity Memorial") has to sell off in order to merge with its competitor, Stewart Enterprises. Industry experts push the line that consumers don't choose cremation over burial because of price, but because of "personal" or "religious" reasons. This is plain nonsense; price is one of the top factors consumers cite when they pick cremation over burial.

Somehow the FTC found this "logic" persuasive, and it affected how they decided which funeral businesses SCI has to divest. From the FTC's consent order:

“Funeral services do not include cremation services because consumers do not substitute cremation services for burial services based upon price, and the competitive conditions for cremationservices are substantially different than other funeral services. Since consumers primarily choose their final disposition on their personal or religious views, consumers generally do not view cremation services as a viable substitute for funeral services.”

This is remarkable. It completely contradicts the experience of consumers and consumer advocates like FCA. We have to wonder whether the Federal Trade Commission has any idea at all what choices the average American family has to make when death comes, and how tight budgets affect those. Americans do not have unlimited money to spend on funerals, and huge numbers of people have switched to cremation for its affordability as compared to casketed cemetery burial.

FCANT President Jim Bates examines this in more detail in commentary submitted to the FTC, reproduced below.

A press release from the Jewish Funeral Practices Committee of Greater Washington:

December 30, 2013

For the Jewish Funeral Practices Committee of Greater Washington

Contacts: Bob Hausman, 202-966-1545

David Balto, 202-577-5424

The Jewish Funeral Practices Committee (JFPC) of Greater Washington cautiously welcomes the Federal Trade Commission's proposed agreement with Service Corporation International (SCI) requiring them to divest Edward Sagel Funeral Directions in Rockville as a condition of allowing SCI to acquire the nation's second largest funeral services provider, Stewart Enterprises. The FTC clearly accepted the Jewish community’s argument that there was a competitive problem in the DC/MD Jewish funeral home market.

Unfortunately, the FTC proposed decision to require the divestiture of Sagel is the wrong remedy. The Commission should have required the divestiture of Hines Rinaldi because it is an effective competitor and Sagel is not. Sagel is basically a modest storefront, does not have a chapel or facilities to handle bodies, and its market share has fallen from 25% to about 11% in the past three years.